Houston Owner Finance Homes

Try to sell a mortgage note lately?

Chances are the pricing was hit by property value in one of three ways.

Home prices have dropped an average of 21% in the last three years, over 50% in some hard hit areas, and it plays a major role in how much a mortgage buyer will pay for an owner financed note.

Here’s a quick glance at what is happening around the country to home prices:

Median Sales Price for Existing Single Family Homes

2006                        2009                        Change

US                                    221.9                        173.2                        -21.9%

North East                        280.3                        240.7                        -14.1%

Mid West                         164.8                        142.5                        -13.5%

South                                 183.7                        154.6                        -15.8%

West                                  350.5                        224.2                        -36.0%

Source: Data Compiled from National Association of Realtors

So how do falling property values affect the pricing?

Big Reason #1 – Equity

When you go to sell payments on a mortgage, trust deed, or contract the note buyer wants to know today’s value of the property. This helps the investor see how much equity a buyer has in the home.

If the property value went down from the time the buyer purchased it means their equity decreased too. The lower the equity the more likely the buyer will go into foreclosure.

When an investor sees more risk they want more reward. Think of it like this:

More Risk

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What is Your Livelihood Worth?

It’s not a ridiculous question. As you read this, governmental agencies are actively working to eliminate all but the most basic form of owner financing without being a licensed mortgage originator.

Now industry leaders have joined efforts in the creation of an association to protect property owners, home buyers, and professionals in the seller-financed industry.

NAPPPR Mission Statement

The National Association to Protect Private Property Rights (NAPPPR) was created to preserve the rights of Americans to provide seller financing on property they own. The NAPPPR will work diligently to reach the following objectives:

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